Abbott faces call to defend paid parental leave plan

Michael Gordon, Daniel Hurst

Opposition Leader Tony Abbott will be asked to defend, discard or modify his promised generous paid parental leave scheme in the Coalition party room next week, amid growing internal concerns that it is not affordable.

Calls by Sydney Liberal Alex Hawke for the policy to be scrapped before the September election have been backed by requests from two prominent West Australian Liberals for the Coalition's leadership to justify the policy.

Veteran backbencher Dr Mal Washer has asked Mr Abbott, shadow treasurer Joe Hockey and finance spokesman Andrew Robb to ''explain if this is still a good idea'' given the ''dire straits the Labor Party has got us into with its fiscal mismanagement''.

Fellow WA MP Dennis Jensen said he was worried about the cost of the scheme, as the levy on big business to fund it could cost jobs and affect prices. ''There are a whole lot of potential unintended consequences which would eventuate from this which I don't think have been adequately looked at and addressed,'' he said.

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Mr Hockey had earlier mounted a passionate defence of the parental leave scheme, branding Mr Hawke a lone voice in wanting it dumped and declaring that the Coalition was ''absolutely committed'' to the policy, which would boost female participation in the workforce, increase productivity and deliver a ''massive benefit'' to small business.

The scheme offers new mothers 26 weeks' parental leave on full pay, up to a maximum wage of $150,000 a year, to be funded by a 1.5 per cent levy on about 3200 of the biggest companies.

This levy was to have been fully offset by a 1.5 per cent cut in company tax for all, which has since been replaced by the promise of a ''modest'' company tax cut. It compares with Labor's taxpayer-funded scheme offering 18 weeks' parental leave at the minimum wage.

In an address to the free market think tank, the Institute of Public Affairs, Mr Hockey conceded there were aspects of the scheme ''that some people might not like'', but insisted it would deliver ''real, on-the-ground action for small business''.

While Mr Hawke, the member for Mitchell in north-west Sydney, maintains there is ''widespread'' concern in Coalition ranks that the policy is unaffordable in the current fiscal climate, there is virtually no prospect of Mr Abbott facing a revolt on the issue.

Several MPs agree with the views of those who have now gone public, but the overwhelming view is that nothing will be done or said to undermine Mr Abbott's election prospects.

While Mr Hockey defended the scheme on Monday, he volunteered that ''if we can't get control of the budget now, then we never will'' - and warned of cuts to middle-class welfare under a Coalition government.

Repeating his view that all developed countries are now facing ''the end of the era of universal entitlement'', he said: ''Addressing the ongoing fiscal crises will involve the winding back of universal access to payments and entitlements from the state. This will require the redefining of the concept of mutual obligation and the reinvigoration of a culture of self-reliance.''

Mr Hockey cited his family's experience in small business to support the case for the parental leave scheme, saying his father had a high turnover in receptionists because, unlike big business and the public service, he could not afford to pay parental leave and ''couldn't compete on a level playing field''.

''Tony Abbott, and our policy, is the only one that gives small business exactly the same platform as big business - and, importantly, small business doesn't have to pay it,'' he said. ''That's why it's important. It's a leveller, an opportunity.''

243 comments

The Coalition has a clear choice. If it wants to implement its version of the PPL scheme it must cut away the baby bonus as a result. The baby bonus costs around $800 million a year and cutting that program would go some way to help pay for it. Business doesn't need anymore levies or tax increases because they are doing it tough enough as it is because of this governments policies and the high Aussie dollar. People should not be paid lump sum bonuses to have babies but an affordable PPL scheme is essential to help working mums.

Commenter

Cakeboss

Location

the Hills

Date and time

May 07, 2013, 5:43AM

Cakeboss

The issue also includes the LNPs second bite of the policy cherry and both bites have been sour I don’t disagree with you that the Baby bonus( another LNP brain snap) should be scrapped though governments will do this incrementally.

There is an affordable scheme CB it the ALPs PPL and BTW it the first of its kind in Australia’s history and the LNPs version is policy on the run ill conceived

The ALPs is not an impost on business at all and it is fair to all the LNPs maybe more generous however it is unsustainable in the long run smoke back benches have the wobbles

What other policy "gems" does Abbott have up his sleeve?

Commenter

Buffalo Bill

Location

Sydneys Northshore

Date and time

May 07, 2013, 6:28AM

yes cut the baby bonus of $5000 to most people and allow someone earning $150,000 a year to claim $75,000 from the government in welfare, thats equitable

Commenter

jb

Date and time

May 07, 2013, 6:33AM

Like so many attempts to win votes this is yet another idiotic 'scheme' to win favour from the Australian public, but yet again one which seems to have been worked out by Abbot on the back of a cigarette packet. These effective tax increases will hit business profits, staff may lose jobs, and costs to government will increase.

The reduced business profits will then also reduce tax revenue for government. Our economy is being run by a government which is just looking for the quickest tax dollar it can find to stem the leaking dam, and for the opposition to suggest equally ridiculous effective tax increases really confirms neither party should be running our country.

Yes a paid parental leave system is required, yes someone on $150k p.a. should get far more than anyone on half that salary, but to increase business tax to fund this is utter stupidity. If the economy could afford it, this would be a nice to have, but it can't.

Commenter

ABC

Date and time

May 07, 2013, 6:41AM

So take away baby bonus payments to the single mums and low income earners to pay those on higher incomes. Great way to rob the poor to pay the "rich".

Commenter

the anti robin hood

Date and time

May 07, 2013, 6:41AM

@Buffalo Billi expected someone like you living in the priviliged north shore and in heart of LNP electrole to drum up support for paid parental leave of TA.. Why dont you move to a more working class electrol down in Mt Druitt and then put forward your idea's

Commenter

Starling City Warrior

Date and time

May 07, 2013, 6:48AM

Oh for gods sake you people need to get a grip.1.47% of women in Australia between 18 and 47 have a salary of 150k or more so they might get the 75k. Most have an average salary of about 55 - 65k that's why its called an average. So the paid parental scheme will give the average mother about 30k.As Eva Cox stated yesterday you could probably count the women who will get 75k on one hand. Why not give credit where credit is due. Its a good scheme and will make women want to get back in the workforce if they wish to do so without the added stress. Just because Tony came up with it doesn't make it bad. As for the other rubbish about how much it will cost the big business my heart bleeds especially for the banks.

Commenter

J Walker

Date and time

May 07, 2013, 6:49AM

Buffalo Bill - the Labor scheme is not exactly groundbreaking. Pay the minimum wage for however many weeks. How do you expect them to fund it - a new levy too perhaps ?

Also if Labor's about mothers here, why have they cut the baby bonus ?

Having said that the Coalition scheme is not a bad idea but it's too expensive, and should be distributed more equitably. Needs to be reworked.

It'll be curious to see how the politics will play out too - it's the first time in a long time that team harmony has been upset, which is a credit to Abbott's leadership.

Commenter

Hacka

Location

Canberra

Date and time

May 07, 2013, 6:50AM

Do we really need to pay wealthy parents 26 weeks of their high salary to sit at home?? This policy is a joke & shows where the Libs really want to buy votes.It seems the top end of town (well off or affluent voters) are better to buy with votes because they cry the loudest & have the most effectively loud voice.I would think even paying parents 26 weeks of leave at a $70k salary would be excessive.I thought the scheme was meant to be a support ... not a give rich people more entitlement.As usual the libs bring in these vote buying exercises without any forms of means testing or care about wage/support equality.Can we really keep swallowing this nonsense??? That is the question.Its lucky Abbott can do anything & still win ... if he had to have good policies .... he wouldn't have the slightest hope. It says enough that the libs still bark up the wrong tree with Abbott.

Commenter

Yuppy

Location

Yuppy Ville

Date and time

May 07, 2013, 6:55AM

I wasn't saying that the ALP's scheme was an impost on business. My issue is that the nation cannot afford the Coalitions PPL scheme at the expense of slugging business an extra 1.5%. The baby bonus served its purpose in lifting Australia's birth rate but it is now not required. Even as a liberal voter I agree that the Coalitions PPL scheme is unsustainable in the long term but if they want to proceed with it they must choose to cut the baby bonus to help pay for it or maintain the status quo we have now.